O2 already offers a 12-month contract, but it only applies to Sim-only deals - what you'd choose if you decide to keep your current phone when your existing contract ends.

The new one-year contract allows customers to upgrade their handset too. You pay as much as you do on a monthly basis for an 18-month contract. If you want lower monthly payments, you'll need to take out a new two-year plan.

Standard packages run from 50 minutes of airtime and 250 text messages - £15.50 per month for 12- and 18-month deals, £10.50pm for a 24-month contract - to unlimited messages and minutes for £62pm and £57pm, respectively.

You can opt to pay an extra £3, £6 or £10 per month for 100MB, 500MB or 1GB, respectively, of data, which now includes phone tethering a no extra cost. Until now, it cost you £7.65 extra. That's handy for folk who want to use their iPhone 4's newly gained Wi-Fi hotspot feature, or the same on an Android handset.

The basic tariffs do not include data, so a bolt on is essential for mobile access to the web, email, apps and so forth.